MPG - Metro Glass

[BlackPeter]

This slide from full year announcement is pretty awful - H217 profits down 18%

Wonder how bad the slide will look for for this half year - especially in context of AGG contribuzting $4m plus ebitda v last year

Sure - but pretty old news, isn't it? Their story is that they had problems to get these new toys they installed before Christmas to run ... and had to introduce three shifts during the busiest time of the year to keep up with demand. They still made the revenue growth but had to pay lots of overtime to make it ...

So, yes - we do know why their NPAT dropped - and (unless you have better information) I don't see why we should not believe them. Sounds like a one-off problem to me.

[percy]

The Calgary Stampede did not happen,or has not happened yet.
Appears there were an equal number of pick up trucks, and dump trucks, at the loading dock this morning.

"Today is the day, that yesterday you worried about,and all is well." [so far].

[Beagle]

Forward PE on Steel & Tube holdings is just on 9. MPG being tarred with the same brush seems a bit harsh considering STU's well known problems.

[James108]

Forward PE on Steel & Tube holdings is just on 9. MPG being tarred with the same brush seems a bit harsh considering STU's well known problems.

Stu have far more debt but also much higher nta, they pay much lower interest on debt.

[winner69]

Sure - but pretty old news, isn't it? Their story is that they had problems to get these new toys they installed before Christmas to run ... and had to introduce three shifts during the busiest time of the year to keep up with demand. They still made the revenue growth but had to pay lots of overtime to make it ...

So, yes - we do know why their NPAT dropped - and (unless you have better information) I don't see why we should not believe them. Sounds like a one-off problem to me.

Yes old news - share price was 140 when they showed that and market obviously took it in its stride and the share price hung around that mark for a while (did go over 150 for a day or 2)

Later news flat was mentioned and the market reacted

Wonder how flat half one is going to be?

[JoeGrogan]

Forward PE on Steel & Tube holdings is just on 9. MPG being tarred with the same brush seems a bit harsh considering STU's well known problems.

The main reason i haven't backed up the truck on this one is because STU is on a current PE of 9.7. Also it has a lower market cap then MPG while also making more profit and paying a larger dividend. NTA is also more then STU's current SP. If MPG is no longer a growth stock (single digit growth is likely a best case scenario this year), it seems like MPG should be priced where it is currently on a PE of roughly 10 until it can show the market that growth is actually going to be attainable. Currently it just looks like MPG is going to follow the footsteps of STU performance wise, until management can show the contrary (if that actually happens).

Of course STU is also contingent on steel prices, but i'm not sure what the current outlook of steel is, and whether this is priced into STU's current sp.

[winner69]

Stu have far more debt but also much higher nta, they pay much lower interest on debt.

Yes indeed - MPG more leveraged than STU

And STU twice as big a company

[Beagle]

The main reason i haven't backed up the truck on this one is because STU is on a current PE of 9.7. Also it has a lower market cap then MPG while also making more profit and paying a larger dividend. NTA is also more then STU's current SP. If MPG is no longer a growth stock (single digit growth is likely a best case scenario this year), it seems like MPG should be priced where it is currently on a PE of roughly 10 until it can show the market that growth is actually going to be attainable. Currently it just looks like MPG is going to follow the footsteps of STU performance wise, until management can show the contrary (if that actually happens).

Of course STU is also contingent on steel prices, but i'm not sure what the current outlook of steel is, and whether this is priced into STU's current sp.

Analyst presentation from late August https://www.nzx.com/files/attachments/263746.pdf
Lot of talk in there about looking for efficiencies, recent acquisitions and the tough and uncertain construction market too. A lot of similarities at first glance.
As I said last week, its hard to make a good case that MPG deserves to be on a forward PE of more than 10, (fair price $1.15 ). Really its up to management to prove it deserves a higher rating and until they do its quite possible we'll be staring at the cricket wickets like a possum stuck in the headlights for quite a while yet... 111 or thereabouts. I think FBU are dramatically over-priced rather than STU or MPG being seriously under valued.

[steveb]

Quite happy to stare at the cricket wickets summers on the way.more than happy to collect a div yield of just under 10%.
Also quite happy to top up @ $1.10-$1.15.I believe the hound is right its a fair price

[JoeGrogan]

I think FBU are dramatically over-priced rather than STU or MPG being seriously under valued.

Also add MVN to the over-priced list being on or about 13pe.

Disc: Broke my rule of staying clear of the construction sector and bought a small parcel today. On the face of it, the current price seems fair, and i think that the negative sentiment towards the sector may subside somewhat after the election. Worth a cheeky punt.